November 2020 – Media Matters

November 11, 2020November 11, 2020

Beginning of the End for Video Game Consoles?

This week Sony and Microsoft are launching their next-generation consoles in the form of the PlayStation 5 and Xbox Series X. It’s been 7 years since the last major upgrade, and this one is shaking things up with serious gamers. Some of the new technologies include: ray tracing, 3-D audio, ultra-fast frame rates, and a controller that incorporates vibration-based haptic feedback.

At the same time, some industry analysts are wondering if this is the beginning of the end for consoles with the rise of cloud video gaming services as the next big thing. Google’s Stadia (“no console, no download”), Amazon’s Luna, Apple’s Arcade and Facebook Gaming are all vying to be the future of video gaming.

To keep things in perspective, the video game industry is three times as big as the Hollywood movie industry. Yes, that’s right…video games generate three times the revenue as Hollywood blockbusters…and that doesn’t even take into account the hit that movies theaters have taken with the pandemic. But even with success measured on this level, the gaming industry needs to be nimble and quick to respond to consumer demand. Whoever comes up with the next big development in video gaming will be richly rewarded.

November 9, 2020November 6, 2020

Bad News at ESPN

ESPN, the sports cable channel and ratings powerhouse, is laying off hundreds of employees and announcing that it will not fill hundreds of additional open positions. The cuts total approximately 10% of their overall employees.

The Covid pandemic has not been kind to TV sports and ESPN is suffering as a result. When the pandemic hit, professional and college sports were sidelined, and when the athletes returned to the fields, the viewers, for some reason, did not return to their TVs. As I noted in an earlier post, TV ratings have tanked for nearly every sport and analysts are not sure why.

The economic model for most major media channels is based on advertising revenue. Ad dollars follow audiences made up of prospective consumers of the products that advertisers need to reach. If ESPN can recapture sizable audiences for their programming, advertising revenue will follow and that will allow them to rehire workers. But until then, they have to find ways to cut their losses. And remember, ESPN has huge costs that are baked-in. According to Morning Brew (and the New York Times), “ESPN is paying more than $7 billion for the rights to air live sports in 2020, the NYT writes. But due to the Covid-19 outbreak, it basically had no games to broadcast for four months of the year.”

It is important to note that Disney, the parent company that owns 70% of ESPN, is in no position to bail them out. With motion picture production on a slow track and theme park and movie theater attendance way down, Disney has its own challenges.